Lack of clarity on Covid-19 force majeure provisions: experts

DUBAI, April 6, 2020

There is a lack of clarity when considering the Force Majeure provisions for businesses in the region as a result of the Covid-19 pandemic, a panel of experts has said.

It is imperative that each contract must be considered on its own precise terms and in its specific context. This, in turn, puts a huge onus on companies and employers to act responsibly towards all their stakeholders and especially their employees in these extraordinary circumstances, said the experts.

These were the key takeaways at a webinar held today by the GCC Board Directors Institute (GCC BDI), a not-for-profit organisation that helps board of directors acquire the expertise and tools for effective governance, and APCO Worldwide – the global advisory and advocacy communications consultancy.

Over 185 participants, including experts from multinational and local organisations operating across the region, joined the webinar, hosted in collaboration with Al Tamimi & Co (UAE and Bahrain) and Khoshaim & Associates (KSA). The webinar served as a platform to better understand the legal implications triggered by Covid -19 in the UAE, Saudi Arabia (KSA) and Bahrain.

The discussions covered a constructive exchange of views on the impact of Force Majeure, the measures being adopted by companies in the Gulf region to sustain business and the obligations toward employees. The panel also highlighted the need to set up a robust crisis management infrastructure and consistent stakeholder communication in critical times to manage such extraordinary situations.

In her opening remarks, Jane Valls, Executive Director, GCC Board Directors Institute, shed light on the trending risks imposed by Covid-19 and emphasised the importance of practical advice to firms. She said: “These are indeed challenging times for businesses and it is important for Board Directors and Executive Management to understand the impact on their internal and external contracts and the key areas of focus during these times of crisis. Through our webinar today, we have been able to strengthen the dialogue around legal obligations in a timely manner and shed some important insights.”

During the panel, Zeyad Khoshaim focused on the contractual obligations of businesses in Saudi Arabia, while Foutoun Hajjar gave an overview of the legal implications of Covid-19 on businesses in Bahrain. Naief Yahia presented his views on the latest Ministry of Labour guidelines in the UAE, while Nicholas Labuschagne emphasized the need for businesses to have more clarity and empathy in their communications to their internal and external stakeholders.

The recording of the webinar can be viewed on https://apco.box.com/v/apcogccbdiwebinar.

GCC BDI will host another webinar on the topic “Leadership in Extreme Times” on April 8. For registration for the webinar, please visit https://gccbdi.org/events/event_list.asp -TradeArabia News Service